Are we in a recession? UPS, FedEx, say yes

Bloomberg News is reporting that the volume of UPS and FedEx shipments this year are indicators that we’re already in a recession. These bellwether companies are not only suffering from emptier trucks and airplanes, but, like the rest of us, are paying for higher gasoline prices and jet fuel (yes, you’re paying for higher-priced jet fuel. Tried to check a second bag lately?) Anyway, here’s the beginning of the canary-in-a-coal-mine story:

April 22 (Bloomberg) — Falling shipments at United Parcel Service Inc. and FedEx Corp., who together deliver 80 percent of packages in the U.S., show the economy is in a recession and unlikely to rebound this year.

UPS, whose domestic volume has outperformed the gross domestic product for almost a century until last year, said April 8 that deliveries dropped in the first quarter. UPS also said earnings for the three months through March will miss its previous projection by as much as 7.4 percent, just the third time the Atlanta-based company has made a new forecast that was below an earlier one.

FedEx’s U.S. shipments dropped 2 percent last quarter, and the company said last month it would have “limited earnings growth” this year because of the slowing economy. Both companies are also struggling with soaring jet-fuel, gasoline and diesel costs after crude oil surged 80 percent in the past year.

“This is what a recession feels like,” said Steven Marco, who manages $800 million including UPS shares at Marco Investment Management LLC in Atlanta. “The trucks are not as full as they used to be.”